Saturday, the U.S. Senate passed the House-sponsored Omnibus Appropriation Bill that funds the federal government through September 2015. In all likelihood, all eyes weren’t glued to these proceedings, perhaps otherwise attentive to holiday shopping or the events around nationwide protests about policing in our cities.
Healthcare is a huge part of the federal budget: combining spending for Medicare, Medicaid, Children Health Insurance Program (CHIP), military and veterans’ health, Indian Health Services and federal employee health benefits, it represents 35% of the total $3.9 trillion budget. For the decade prior to the economic downturn, total health spending increased 7.2% annually. During the downturn, it slowed to less than 4% but is expected to increase to 6% annually for the decade ahead. That means healthcare spending will be an even bigger part of federal budgets going forward.
Continue reading “The FY15 Budget: There’s More to it Than the Numbers”
Filed Under: THCB
Tagged: FY2015 Budget, Health care spending, Medicaid, Medicare
Dec 16, 2014
My life changed dramatically 18 months ago when I started my new practice. The biggest change personally was a dramatic drop in my income as I built a new business using a model that is fairly new. That’s a tough thing to do with four kids, three of whom were in college last fall. OK, that’s a stupid thing to do, but my stupidity has already been well-established.
Yet even if the income stayed identical to what I earned before the switch, the change in my professional life would have been nearly as dramatic.
- I am no longer focused only on patients in my office.
- I am no longer focused on ICD and CPT codes.
- Saving patients money has become one of my top priorities.
- I feel like my patients trust me more, and see me as an ally.
- Patients accept my recommendations for less care (avoiding unnecessary testing and unnecessary medications) much easier.
- I focus far more on preventing problems or keeping them small.
- I laugh with my patients far more.
- I no longer feel like a Zombie at the end of the day (and I no longer eat brains)
Continue reading “Doctors vs. Zombies”
Filed Under: Physicians, THCB
Tagged: Coding, CPT, ICD-10 codes, Medicare, payors, practice management, Reimbursement, Transaction theory
Jul 16, 2014
Five years ago, my mother needed an orthopedic surgeon for a knee replacement. Unable to find any data, we went with an academic doctor that was recommended to us (she suffered surgical complications). Last month, we were again looking for an orthopedic surgeon- this time hoping that a steroid injection in her spine might allay the need for invasive back surgery.
This time, thanks to a recent data dump from CMS, I was able to analyze some information about Medicare providers in her area and determine the most experienced doctor for the job. Of 453 orthopedic surgeons in Maryland, only a handful had been paid by Medicare for the procedure more than 10 times. The leading surgeon had done 263- as many as the next 10 combined. We figured he might be the best person to go to, and we were right- the procedure went like clockwork.
Had it been a month prior to the CMS data release, I wouldn’t have had the data at my fingertips. And I certainly wouldn’t have found the most experienced hand in less than 10 minutes.
It’s been a couple of months since the release of Medicare data by the Centers for Medicare and Medicaid (CMS) on the volume and cost of services billed by healthcare providers, and despite the whiff of scandal surrounding the highest paid providers (including the now-famous Florida ophthalmologist that received $21 million) the analyses so far have been somewhat unsurprising. This week, coinciding with the fifth Health DataPalooza, is a good time to take stock of the utility of this data, its limitations, and what the future may hold.
Continue reading “10 Things You Can Do With CMS Data”
Filed Under: Tech, THCB
Tagged: CMS, Data Dump, Mash ups, Medicare, Outliers, Practice patterns, Quality, specialists, Trending, Value
Jun 9, 2014
Late last Friday after the financial markets closed, the Centers for Medicare and Medicaid Services (CMS) issued its annual notice of 2015 payments to private insurers who sell Medicare Advantage plans to seniors. Its determination that a 3.55% cut is in order was spelled out in a complicated 148-page explanation of its methodology.
The net impact of changes to “coding intensity” adjusted for geographic variation essentially means insurance companies would see a 1.9% cut in their payments per Avalere’s calculations.
But there’s more to the story than the Medicare Advantage payment adjustment. The difference between last year’s Round One rate negotiation and this year’s Round Two is significant.
Medicare Advantage (MA) plans enroll 28% of seniors. It is popular: enrollment increased from 5.3 million in 20104 to 16 million today—a 9% increase last year alone. MA plans are required to offer a benefit “package” at least equal to Medicare’s covering everything Medicare allows, but not necessarily in the same way.
Continue reading “Medicare Advantage Round Two: Negotiation Will Not Be the Same”
Filed Under: The Business of Health Care
Tagged: CMS, Health Plans, Insurers, Medicare, Medicare Advantage, Paul Keckley
Feb 28, 2014
Partisan gridlock in Washington regarding health policy has been so pervasive and bitter that any bipartisan co-operation on any important health issue should be applauded by a frustrated public.
That is why the emerging bipartisan compromise regarding the fifteen-year long policy embarrassment known as the Sustainable Growth Rate (SGR) problem needs to be taken seriously.
Remarkably similar solutions — a new hybrid physician “value-based” payment methodology — have emerged from three of the four key committees in Congress, and seemingly the only stumbling block is finding the $115-120 billion to pay for it.
Moreover, key physician interest groups, including the American Medical Association, appear to have signed off on this approach.
This makes it all the more troubling that the approach taken is unsound health policy that will damage practicing physicians in diverse settings: private practice, medical school practice plans, and hospital employment.
This is because the proposed legislation casts in concrete an almost laughably complex and expensive clinical record-keeping regime, while preserving the very volume-enhancing features of fee-for-service payment that caused the SGR problem in the first place. The cure is actually worse, and potentially more expensive, that the disease we have now.
The SGR fix would basically freeze or severely limit future physician fee updates for Medicare Part B (a serious problem for primary care), while permitting physicians to earn modest “value-based” bonuses if they can document quality measure attainment, cost reductions, participation in alternative payment schemes, practice enhancement activities, or meaningful use of EHRs.
Physicians who meet all these standards could expect to supplement their existing Part B fee by about 4 percent in 2016, going to 10 percent in 2020, with the aggregate bonuses subtracted from the pool of total Part B physician payments to preserve budget neutrality. Non-compliant physicians would see corresponding reductions in their updates.
There are sensible opt-outs for physicians who can report in groups, virtual or real, as well as for physicians who participate in as yet unspecified “advanced payment models” (APMs).
Continue reading “Why the SGR Fix Won’t Work and Could Actually Make Things Worse”
Filed Under: Physicians, THCB
Tagged: American Medical Association, Doc Fix, Jeff Goldsmith, Medicare, sustainable growth rate (SGR)
Feb 7, 2014
No-one can say any longer that Senate Republicans are entirely deaf to calls to describe how they would replace the much maligned Affordable Care Act.
This week, three senior GOP senators (Orrin Hatch, Tom Coburn, and Richard Burr) announced their proposed Patient Choice, Affordability, Responsibility, and Empowerment (or Patient CARE) Act. Given that each of this group is a heavyweight mainstream Republican and that Senator Coburn is one of the few physicians in the Congress, the draft Act deserves a serious look.
Although the first part of the draft would repeal the ACA, other parts would continue a number of the ACA’s reforms while introducing some changes in attempts to control costs and reduce the numbers of uninsured, creating a kind of Obamacare Lite.
The draft proposes to continue the ACA’s ban on lifetime insurance caps, its coverage of dependents up to the age of 26, and the ACA’s savings in Medicare costs. It also continues, although in a weaker form, the ACA’s subsidies for low-income individuals and the ban on medical underwriting, and allows states to continue to operate insurance exchanges (although without any federal funding).
On the other hand, the three parts of the ACA that have taken the most heat from Republicans – the individual mandate, the Medicare IPAB, and the expansion of Medicaid eligibility – would all be eliminated.
Continue reading “After Months of Thought Senate Republicans Propose Obamacare Lite”
Filed Under: Uncategorized
Tagged: GOP Repeal, Individual mandate, Insurance, IPAB, Medicaid Expansion, Medicare, Orrin Hatch, Patient CARE Act, Richard Burr, Roger Collier, The ACA, Thomas Coburn
Jan 31, 2014
The federal government’s announcement last week that it would begin releasing data on physician payments in the Medicare program seems to have ticked off both supporters and opponents of broader transparency in medicine.
For their part, doctor groups are worried that the information to be released by the Centers for Medicare and Medicaid Services will lack context the public needs to understand it.
“The unfettered release of raw data will result in inaccurate and misleading information,” AMA President Ardis Dee Hoven, MD, said in a statement to MedPage Today. “Because of this, the AMA strongly urges HHS to ensure that physician payment information is released only for efforts aimed at improving the quality of healthcare services and with appropriate safeguards.”
On the other hand, healthcare hacker Fred Trotter has raised concerns about CMS’ plan to evaluate requests for the data on a case-by-case basis. That isn’t much of a policy at all, he wrote, giving federal officials too much discretion about what to release.
So, how is this all going to shake out?
Three recent examples offer some clues. Continue reading “Some Predictions on How Medicare Will Release Physician Payment Data”
Filed Under: THCB, The Business of Health Care
Tagged: AMA, Charles Ornstein, CMS, Data, Data Politics, Fred Trotter, Medicare, Physician payments, Transparency
Jan 23, 2014
Congress just had an uncharacteristically big week – with significant implications for healthcare policy. It flew by fast and furious, so here we pause to unpack the most significant developments and what they teach us about the future.
1. The Permanent Doc Fix Effort is Real. You have to hand it to the committees of jurisdiction, they have kept their heads down and plugged away all year at permanently repealing the broken Sustainable Growth Rate (SGR) formula that dictates Medicare payments to doctors. They’ve floated new payment methodologies, added policy addressing the package of “extenders” that perennially travels with the “doc fix,” and now all three have successfully completed bipartisan mark-ups of their respective approaches. Furthermore, the three month SGR patch that was included in the budget deal is an implicit endorsement by congressional leadership that there’s actually a chance this could happen in the first quarter of next year.
The next step is to identify savings to pay the roughly $150 billion price tag, which has always of course been the biggest rub. That process is going to take center stage early next year in a “Super Committee-lite” process of negotiating various potential cuts to healthcare programs. The cynics are still betting against it, but we’re closer than we’ve ever been before to replacing the 15+ year-old SGR.
2. The Long-Term Care Hospital Sector Will Never be the Same. In a lesser-noticed component of the three month doc fix patch alluded to above, Congress eliminated the payment differential for LTCHs (pronounced el taks) and regular inpatient hospitals for patients who do not meet clinical complexity criteria. What began as an esoteric exemption for a small handful of hospitals in the early 1980′s and grew to a $6 billion Medicare benefit annually is now going to start to plateau.
The market liked the change, paradoxically, because it was gentler than some bean counters had recommended and gave plenty of time (four years) for sophisticated companies to adjust. But the hot LTCH business just got some pretty cold water poured on it.
3. The Budget Deal Helps Healthcare Programs. The Murray-Ryan agreement to set spending levels for the next two years alleviated some of the impact of the sequester on discretionary spending programs like those at the FDA, NIH and HRSA. This means that funding for new product approvals, clinical research, workforce development programs and some primary care services will be modestly improved in 2014 and 2015.
Continue reading “The Doc Fix Is Real”
Filed Under: Physicians
Tagged: Billy Wynne, Budget Deal 2013, Congress, Doc Fix, Long Term Care, Medicare
Dec 16, 2013
As we shake off the carb-coma and make our pre-resolutions, Congress and the Administration head into a sprint to the holiday recess fraught with health policy implications. Unlike every December in recent memory, there isn’t very much Congress actually has to do. Here are the top five things you need to know to follow the fun and prepare your organization for the changes afoot. A key theme to take home is that December 2013 is a month of anti-deadlines.
- The Nov. 30/Dec. 1 ”fix” to Healthcare.gov was set arbitrarily and has simply teed up another pivot point for opponents to pounce. We already know the wand hasn’t tapped the electro-synapses of the site yet to make the dang thing work like it should. Expect more incremental improvements through the month and enrollment numbers to come in above current rock-bottom expectations, with a healthy chunk coming from the proud, the few … the state-based exchanges.
- The Dec. 13 deadline for budget conferees to produce a joint resolution is similarly fictional and self-imposed. While there are some burgeoning reports that co-chairs Murray and Ryan might be able to agree to FY14 funding levels and potentially alleviate some of the sequester, the buzz-o-sphere in Washington still has deep doubts. Even if the two negotiators come to agreement, House and Senate leadership have the bigger challenge of getting a bipartisan deal through their chambers.
- Jan. 15 is the real deadline for a budget agreement and the real goal is writing a check to fund the government through Sept. 30. A budget resolution is helpful to give appropriators time to write actual spending policy, but it can be bypassed if the end-game is a continuing resolution that keeps current funding allocations in place. (Congress hasn’t passed an actual budget resolution since Democrats controlled both chambers.) At the end of the day, we’ll be back to the all-too-familiar roundtable of congressional leaders and Obama reps hatching a last-minute deal to avert a shutdown.
Continue reading “The Month of Anti-Deadlines”
Filed Under: THCB
Tagged: Billy Wynne, Congress, December 2013, federal budget deficit, Medicare, Obamacare Fix, physician payment reform, sustainable growth rate (SGR), The ACA
Nov 30, 2013
Recently I was asked to intervene on behalf of a patient who, trapped by circumstance, was paying off an enormous bill for a lithotripsy procedure. What I uncovered wasn’t news, but it drove home how egregious the current system can be, why it so badly needs to be fixed, and how the Affordable Care Act (ACA) helps move us in the right direction.
The patient had health insurance through her husband’s job. But it was cancelled just after the hospital validated it, because the employer failed to pay the premium. The procedure was performed, and the patient was charged as “self-pay.”
If Medicare had been the payor in this case, the hospital’s total reimbursement would have been a little less than $2,000. But the lithotripsy and associated costs were billed at $33,160, or just under 17 times the Medicare rate. After the patient applied for financial assistance, a 30% contractual adjustment was applied, reducing her bill to just under 12 times the Medicare rate.
If the health system had asked her to pay 190 percent of Medicare – typically the upper end of commercial insurance rates – her bill would have been about $3,800. By the time I was contacted, the patient and her husband – responsible people trying to make good on their debt – had already paid the health system $5,700 or 285 percent of Medicare. The hospital insisted they owed an additional $16,000.
I laid this out in a letter to the CEO and, probably because he wanted to avoid a detailed description of this unpleasantness in the local paper, he relented, zeroing out the patient’s balance. No hospital executive wants to be publicly profiled as a financial predator.
But while that resolved that patient’s problem, it did nothing to change the broader practice. Most US health systems, both for-profit and not-for-profit, exploit self-pay patients in this way. Worse, not-for-profit health systems legally pillage their communities’ most financially vulnerable patients while getting millions of dollars in tax breaks each year for providing charity care.
Aggressive collections procedures, including home liens, are widespread.
Some states have strictly limited what hospitals can charge low income patients. In California, uninsured patients with incomes below 350 percent of the federal poverty level (FPL) – $82,425 in 2013 for a family of 4 – can be charged no more than Medicare rates. In New Jersey, patients within 500 percent of the FPL cannot be charged more than 115 percent of Medicare.
Section 9007 of the ACA took effect last year and prohibits excessive pricing for self-pay patients, and would revoke a charitable hospital’s tax-exempt status if it charges them more than it charges for insured patients. The language is ambiguous, conceivably allowing health systems to circumvent the law’s intent. But the spirit is clear. To keep their not-for-profit tax status and perks, health systems must stop taking advantage of self-pay patients.
Continue reading “And Yes, The Affordable Care Act Really Does Make Care More Affordable. Here’s One Example ….”
Filed Under: THCB, The Business of Health Care
Tagged: Brian Klepper, Costs, Hospitals, Medicare, Patients, Premiums, self-pay patients, The ACA
Nov 18, 2013